Contrary to widespread belief, America is not broke. Our calculations suggest that total domestic net worth was as much as 550% of GDP in 2011. America is not deep in debt to foreigners either. Net external liabilities are a modest 30% of GDP, well below the levels that triggered problems in other countries, and only a fraction of domestic net worth. The upshot is that there is very little risk of either a collapse in the dollar or a spike in long-term interest rates.
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